06.08.06
Estate Tax Reform
From the Thursday, June 8th, 2006 Wall Street Journal Opinion Page:
Edward McCaffery, an estate tax expert at USC Law School, argues that “if breaking up large concentrations of wealth is the intention of the death tax, then it is a miserable failure.”Do the Kennedys or Rockefellers look any poorer from the existence of a tax first created in 1917? The real people who pay the levy are the thrifty middle class and entrepreneurs who’ve built up a modest nest egg or business and are hit by a 46% tax when they die.
$2 million. That’s the value an estate has to reach before a single cent is paid to the government. “thrifty middle class”? “modest nest egg”?
Beyond that, I agree that the fact that the Kennedys and Rockefellers(and more importantly, the Waltons, of Wal-Mart fame) have passed down too much money, creating an English-like blue blood class that never actually earned their money.
Which is why the the estate tax certainly does need reform: The tax rate needs to be higher. I’m thinking 100% over $5 million, with the exemption increasing with the CPI. The law should be written so that, if money somehow passes to a relation, the tax is retroactively applied.
So, if the Walton family doesn’t like the idea of giving their fortunes to the government, they’re fully welcome to give their wealth to charity upon their death, just so long as none of the money ends up in the hands of their relatives.
And, just to be clear, I’m not a pro-tax liberal; I don’t begrudge Bill Gates and Warren Buffet their fortunes, as they earned it rather than inherited it. But they woudn’t be rich without having our society support their causes with money and laws, so when they die they should have to give up their fortunes, so that the next generation of super-wealthy in the United States will be people who will do it the old-fashioned American way — earn it.